Our ratings on Mitsui & Co. Ltd. (A+/Stable/A-1) reflect its relatively strong profitability, backed by a solid business franchise that comprises mainly resources and energy businesses. In addition, they reflect adequate balance between its risk assets and buffers against such risks, thanks to steady accumulation of profits. On the other hand, the ratings are constrained by a relatively small profit contribution from its nonresource businesses.

Mitsui boasts a strong business franchise that mainly comprises resource and energy businesses. Within the resource and energy sectors, the company is especially strong in iron ore, crude oil, and gas businesses. It has a number of interests in highly profitable resources that underpin its earnings. As such, Mitsui generally managed to generate net profits during times of economic stagnation, even when other major general trading companies (GTCs) in Japan suffered net losses. In fiscal 2009 (ended March 31, 2010), after the onset of the global financial crisis, the company's profitability declined due to the rapidly worsening economy, falling commodity and stock prices, and yen appreciation. Nevertheless, Mitsui has been able to maintain a certain level of profitability. In contrast, the profit contribution from its nonresource businesses is relatively small.